Molefe denies all state capture allegations in testimony to parliamentary inquiry

PARLIAMENT, November 21 – After five hours of testimony to Parliament, former Eskom CEO Brian Molefe on Tuesday admitted having phone contact with the Gupta family and knowing of the power utility’s contract with Trillian, but maintained that he had no direct knowledge of corruption.

Molefe claimed that he had been at a remove from the business side of operations in order to focus on ending load-shedding during his 15 months at the helm of Eskom, and flippantly told MPs to raise questions about specific contracts and payments with suspended chief financial officer Anoj Singh.

Molefe initially denied knowledge of Eskom’s agreement with Trillian Capital Holdings, which lacked National Treasury approval but nonetheless saw the company earn some R600 million as a subsidiary of global consultancy firm McKinsey.

He accused Democratic Alliance MP Natasha Mazzone of ambushing him by asking about Trillian, which had been the subject of extensive testimony before the inquiry.

“Trillian was not [on] the list of things…. for you to high-jack me on a transaction that happened on a specific day, there are hundreds of decisions taken at Eskom that the CEO will not know about or know the details of,” he said.

When Mazzone insisted he reveal whether he was aware of the Trillian deal, he responded with an emphatic “no” only to concede later that he knew the company “did some work” for Eskom.

In response to questions from Economic Freedom Fighters chief whip Floyd Shivambu, Molefe stressed that the payments to Trillian were made in the course of this year, after he had left Eskom. He said there was some dispute as to whether the payments were legitimate but he would leave it to Singh to explain to the inquiry. In August, Eskom was forced to retract Singh’s claim that the payments were found to be above board.

“There are different versions of what happened and I am sure that when Mr Singh comes here, he will explain,” Molefe said.

“It was not necessary for me to see all those details.”

As his testimony dragged into the night, Molefe similarly refused to be cornered about about a guarantee Eskom arranged for the Gupta family’s Tegeta Exploration to help it buy the Optimum coal mine.

He was on medical leave in December 2015 when Singh secured the guarantee, Molefe said, and though he could not claim the merit of cancelling it, it was never utilised by the purchaser.

Molefe began his testimony by reading a 19-page statement in which he sought to take apart former Public Protector Thuli Madonsela’s observation that there were close to 60 phone calls between himself and Ajay Gupta over a six-months period. She failed to list Gupta’s number or the dates of phone calls, therefore he had no way of checking the information against his phone records, he said.

Later, when grilled by former finance minister Pravin Gordhan, Molefe conceded that there were phone calls back and forth with the family “but not that many”, and said the conversations had centred on coal quality.

He tried to dismiss Madonsela’s report as “just fresh air” and said that because she had recommended further investigation her findings were not final or binding, according to his legal advisors.

“The moment she says ‘appears’, she is just speculating,” he said when African Christian Democratic Party MP Steve Swart questioned him about Madonsela’s conclusion that Eskom’s conduct around the Optimum coal mine seemed designed to enable Tegeta to acquire it.

Molefe said the fine imposed on Optimum by Eskom for sub-standard coal was reduced from R2.1 billion to R600 million because the matter went to arbitration once the mine changed hands, and did not point to special treatment for Tegeta.

In a flinty exchange, Gordhan asked Molefe at what point he had become aware that Eskom did not follow proper process to put a guarantee at the disposal of Tegeta. He replied that it was the first he had heard of it.

“Do you expect this committee to take that seriously?” Gordhan asked.

He said it was strange that Molefe claimed not to have read the Dentons report, saying one would have expected a CEO to seize upon it to tackle corruption.

“Dentons was a report to the board and I made a conscious decision to steer clear of it because I had in my mind a mission to do, which was eradication of load-shedding. I did not want my judgment to be clouded,” Molefe responded.

He dismissed a narrative that he was seconded from Transnet to Eskom, along with Singh, to facilitate deals with the utility for the Gupta family. In his telling, he left for Eskom because he shared public anger about scheduled power outages.

The offer to become CEO came at a time when areas like Sandton suffered frequent load-shedding and he visited his Standard Bank branch one morning, only to be told he could not come in as the power was off.

“It took hours to get from Sandton to Irene where I stay and I was very angry as a South African that Sandton was in darkness,” he said and added that allegations of state capture were first raised by critics aft just after the load-shedding crisis had ended.

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